mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc

Pending Home Sales Touch Two Year High:

Contracts to buy previously owned homes rose to their highest level in more than two years in July, an industry group said on Wednesday, suggesting the housing market recovery was gaining traction.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in July, increased 2.4 percent to 101.7 – the highest level since April 2010 and shortly before the deadline for the home buyer tax credit.

The report was the latest to show momentum in housing market recovery, with gains in home construction and sales and prices.

Pending home sales were up 12.4 percent in the 12 months to July.

“All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage,” said NAR chief economist Lawrence Yun.

Contracts in the Northeast gained 0.5 percent last month and increased 3.4 percent in the Midwest. In the South, contracts rose 5.2 percent. The West saw a 1.7 percent drop in contracts last month.

What Happened to Rates Last Week?

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Mortgage backed securities (MBS) gained +66 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move lower.

We had our highest mortgage rates on Monday and our lowest rates Friday afternoon.

We had more good economic news with gains in the Case-Shiller Home Price Index, GDP and Consumer Sentiment. We did have some weaker than expected news with Consumer Confidence and Chicago PMI but they were still at positive levels.

You can clearly see by the chart above that MBS traded in a very narrow range all week until Friday.

Then on Friday – pop – MBS shot up..what happened?

Ben Bernanke happened.

Ben Bernanke spoke at the big economic summit in Jackson Hole, Wyoming on Friday. Traders viewed the content of his speech as pointing directly to another round of quantitative easing from the Federal Reserve. As a result, traders tried to “front run” the Fed by buying longer term bonds. There actually was no official announcement by the Fed that there would be any further stimulative measures, but the market certainly has priced it in.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.

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I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

mortgage broker denverVince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
19519 E Parker Square Dr
Parker, CO 80134

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